Alaska Airlines slashes up to 1,000 jobs; cuts capacity by 8 percent

Alaska Airlines will slash its winter flight schedule — and its workforce — after high fuel prices and the struggling U.S. economy have caused it to lose tens of millions of dollars in the first half of this year.

Starting in November, the Seattle-based airline will reduce its capacity by about 8 percent, eliminating some flights to popular destinations in California and Mexico and canceling low-demand flights. And the company announced Friday that it will cut its workforce by 850 to 1,000 positions (9 to 10 percent) starting in November and continuing into early 2009. Among jobs to be eliminated are those of pilots, flight attendants, aircraft technicians, plus reservations, customer service and ramp agents.

"The one-two punch of record oil prices and a softening economy, on top of increased competition, has burdened Alaska Air Group with a $50-million loss on an adjusted basis for the first half of this year. That demands decisive action to ensure the viability of our company," said Bill Ayer, chairman and CEO of Alaska Air Group, the parent company of Alaska Airlines and Horizon Air, in a statement issued Friday.

"We are changing our schedule to make sure we're flying the right routes with the right frequency and right aircraft. Regrettably, a reduced schedule means we need fewer employees."

Alaska said it is working with employees' unions to offer "early-out" programs and six-month to two-year leaves of absence to minimize the number of involuntary job losses.

In a regulatory filing, Alaska said jobs being eliminated include up to 190 pilots, 350 flight attendants, 150 reservations agents, 200 customer service agents, 35 mechanics, and 60 ramp service and cargo agents.

Its much smaller sister airline, Horizon Air, also is reducing flights and staff. Horizon already has eliminated some regional flights and expects to shrink its capacity by about 20 percent in the fourth quarter compared to the same period last year. Some managers and pilots already have lost their jobs; about 40 pilots will be furloughed in November.

Alaska Airlines' cutbacks come as carriers across the country eliminate flights and employees to cope with high fuel prices and a decrease in domestic passengers due to the struggling U.S. economy.

Among the flight cutbacks that Alaska will make:

• Canceling low-demand flights on Saturdays and holidays.

• Reducing flights — typically one roundtrip a day — in markets with many daily flights,

including Seattle-Bay Area and Seattle-Southern California. • • Operating certain flights between Portland and the Bay Area with smaller planes.

• Ending seasonal service on three Mexico routes, as previously announced, between San Francisco and Cancún, Mazatlán and Ixtapa/Zihuatanejo. Alaska will serve those destinations non-stop from L.A. and will continue to offer a seasonal non-stop flight between Seattle and Cancún.

• Earlier, Alaska dropped flights between Portland and Orlando and between Vancouver, B.C., and San Francisco on Aug. 24. It continues to fly two daily roundtrips between Seattle and Orlando.